US and China exchange tariff duties in trade war.

harbor terminal container container ship

Photo by Markus Spiske temporausch.com on Pexels.com

Sorry for the lack of updates, Trump’s 232 and 301 duties have been occupying most of my time.

As you likely already know, yesterday, the Trump administration announced they will impose 10% duties on $200 billion worth of Chinese goods, earlier today, China announced retaliatory duties on $60 billion in US goods.

If you import from China and have questions about commenting, exclusion requests or other alternatives to minimize the tariff penalty – feel free to give me a call, 832.896.6288 or email me at dhsu@givensjohnston.com.

Current US Tariff Action Deadlines

view of city at airport

Photo by Pixabay on Pexels.com

I receive many questions about the deadlines for all the various tariff actions, I thought I’d post all the upcoming deadlines for your convenience.

If you have any questions regarding any 301 or 232 duties or are interested in filing of comments or an exclusion, or need assistance filing a response to comments, feel free to contact David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

August 20-23 – Public hearing in DC for List 3

August 23, 2018 – 25% duty effective on List 2

September 6, 2018 – deadline to submit written comments for List 3

September 6, 2018 – deadline to submit post-hearing rebuttal comments

October 9, 2018 – deadline for product-specific exclusions for List 1

14 days after request for exclusion posted on docket – deadline for responses to requests for product-specific exclusion.

7 days after the close of response period – deadline for responses filed during the 14-day response period.

To Be Announced – 10% or 25% duty on List 3

GM applies for tariff exemption on their Buick Envision manufactured in China and subject to a 25% duty.

building skyscrapers detroit downtown

Photo by 500photos.com on Pexels.com

According to Reuters, General Motors (GM) is seeking to apply for a tariff exclusion on their Chinese-made Buick Envision. As the Buick Envision is made in China, imports of the vehicle to the US would be subject to a 25% tariff. According to the same article, sales of the Buick Envision total 19% of Buick brand sales in 2017.

According to GM authority, the automaker has currently sold 16,814 Envisions so far in 2018.

The tariff exclusions are also known as the “Section 301” tariff exclusions. Reuters cites the GM’s argument in the filing: “to invest in our U.S. manufacturing facilities and to develop the next generation of automotive technology in the United States” and that “assembly in our home market is not an option” due to low US sales numbers.

Besides applying for a Section 301 exclusion, GM shipped in a six-month supply of Envisions at the current 2.5% tariffs.

Will followup and update if/when the exclusion has been approved.

If your company would like to file a Section 232 or Section 301 exclusion, contact experienced trade attorney, David Hsu at 832-896-6288 or by email at: dhsu@givensjohnston.com.

U.S. Secretary of Commerce expected to present results of national security investigation into auto imports in August.

Wilbur_Ross_Official_Portrait

U.S. Commerce Secretary, Wilbur Ross Official Portrait

U.S. Secretary of Commerce Wilbur Ross (pictured above), will present his Department’s findings on the national security investigation of auto imports into the US later next month.

The report to President Trump could impact foreign automakers as the results may lead to the importation of new tariffs – up to 25% on imported cars and parts.

Earlier in May, the U.S. Department of Commerce started a “Section 232” investigation to determine whether imports of cars and parts pose a risk to U.S. national security. As you are aware, invoking Section 232 is the same rule Trump used to impose tariffs on steel and aluminum at 25% back in March of this year.

Last week, foreign governments from Japan, Canada and the EU along with US industry groups met with Commerce to express opposition to the investigation. These groups argued higher tariffs would harm American consumers and workers along with the economy. Part of the harm would stem from an estimated increase in price of imported cars by $6,000 and price of domestic built cars by $2,000.

Check back for further news regarding the auto import tariffs as they become available.

What should my company do regarding the Section 232 and Section 301 tariffs?

ship with container vans

Photo by Khunkorn Laowisit on Pexels.com

We are fielding a lot of calls from importers, vendors, manufacturers, brokers and freight forwarders about what to do now that the Section 232 and Section 301 tariffs are in place.

We suggest:

  1. Review the list of products to determine your company’s exposure to Section 301 and Section 232 tariffs. The First Section 301 list can be found here.
  2. If there is a product on the second list of the Section 301 tariffs, you should participate in the comment process. The second list can be found here.
  3. If you are importing a product covered under Section 301 or Section 232, look into other alternatives for sourcing.
  4. This may be a good time to review your imported and exported goods and the classification used.
  5. Notify your customers, suppliers, vendors, buyers of potential price impacts of these new tariffs.
  6. Review pending purchase orders and pending shipments with companies in China, Canada, Mexico and the European Union.

If you have any questions about Section 232 or Section 301, contact experienced trade attorney David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com. We also assist in filing exclusion requests and submission of comments, call or email now for immediate assistance.

Trump administration considering new tariffs on imported vehicles.

audi black and chrome grille

Photo by lalesh aldarwish on Pexels.com

Reuters reports the Trump administration may consider imposing new tariffs on imported vehicles based under Section 232 of the Trade Expansion Act of 1962.

A little bit of background – a section 232 investigation is conducted under the authority of the Trade Expansion Act of 1962, as amended and the purpose of a 232 investigation is to determine the effect of imports on the national security. Investigations may be initiated based on an application from an interested party, a request from the head of any department or agency, or may be self-initiated by the Secretary of Commerce.

Reuters reports the administration is currently considering tariffs of up to 25 percent for imported vehicles. As this was just announced, the plan is still not yet implemented and will receive much feedback from interest groups, foreign trading partners, domestic dealers of importer cars and anyone else involved in the import car business.

Check back for the latest news. If you have any questions about the current steel and aluminum tariffs initiated under section 232, contact experienced trade attorney – David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

Senate Finance Leaders Ask Commerce Secretary to Improve Tariff Exclusion Process.

Wilbur_Ross_Official_Portrait

Department of Commerce Secretary Wilbur Ross

According to the Senate Finance Committee website, Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Ore.) urged the U.S. Department of Commerce Secretary Wilbur Ross to implement improvements to the Commerce Department’s process for excluding products from tariffs on steel and aluminum imports under Section 232 of the Trade Expansion Act of 1962.

In short, the letter voices concerns that the process lacks “basic due process and procedural fairness for stakeholders, especially American small businesses” and “appropriate mechanisms to prevent the Section 232 tariffs and product exclusion process from being abused for anticompetitive purposes.”

The Senators write the exclusion request process requires submission of a “substantial amount of information at a minute level of detail” for each imported product and may increase the burden for small businesses. Additionally the Senators state the request and objection forms allow for ambiguity by the Commerce department to approve or deny a product. Lastly, Commerce has not specified how to protect business proprietary information, how to address ex parte communications, how to ensure consistent determination across similar petitioners and objectors.

A full text of the letter can be viewed here (scroll to the bottom, full letter in italics).

If you have any questions about the 232 exclusion process, contact experienced trade attorney David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

Latest CBP Instructions on Section 232 Investigations (April 11, 2018)

Donghai Service Port

Photocredit: Imaginechina/REX/Shutterstock

See below for the most recent instructions regarding the Section 232 Investigations. These instructions were released by the CBP, on April 11th. The original text can be found here.

Commodities: Unchanged and includes steel mill and aluminum articles as specified in proclamations.

COUNTRIES COVERED:
March 23, 2018 through April 30, 2018: All countries of origin except Canada, Mexico, Australia, Argentina, South Korea, Brazil and member countries of the European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom).

However, after May 1, 2018, all countries of origin.

Customs does make a note to remind readers that it is based on the country of origin, not the country of export.

ENTRY SUMMARY FILING INSTRUCTIONS:

Steel Products: importers shall use the HTS classification for imported merchandise subject to duty: 9903.80.01 (25 percent ad valorem additional duty for steel mill products)

Aluminum Products: importers shall use HTS classification: 9903.85.01 (10 percent ad valorem additional duty for aluminum products)

If the two above HTS numbers are not used for importers under Chapters 72, 73 and 76 for the covered countries of origin, these error messages will display:

E1 IQ10 LINE SUBJECT TO QUOTA

E1 FQ09 QUOTA NOT ALLOWED FOR ENTRY TYPE

E1 FQ05 BANNED IMPORT

E1 RF998 TRANSACTION DATA REJECTED

Note: Quota is not in effect, but this ACE functionality is being used to validate entry summary transmissions and reject when validations determine the data is missing the required chapter 99 number.

If importers or filers do not include the chapter 99 code with their Post Summary Corrections for imports under Chapters 72, 73 and 76, the above reject messages will also appear.

Importers may file a protest if they believe an entry was incorrectly liquidated.

Below are the FREQUENTLY ASKED QUESTIONS from the CBP website copied for your convenience.

1. What is the timing of duty calculations on immediate transportation in bond entries subject to Section 232?

Pursuant to the Presidential Proclamations, duties are due on goods entered, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on March 23, 2018.

19 CFR 141.69(b) states:

Merchandise which is not subject to a quantitative or tariff-rate quota and which is covered by an entry for immediate transportation made at the port of original importation, if entered for consumption at the port designated by the consignee or his agent in such transportation entry without having been taken into custody by the port director for general order under section 490, Tariff Act of 1930, as amended ( 19 U.S.C. 1490), shall be subject to the rates in effect when the immediate transportation entry was accepted at the port of original importation.

For such entries covered by an entry for immediate transportation, and with a country of origin and Harmonized Tariff Schedule classification subject to the Presidential Proclamations, such entries shall be subject to the duty rates in effect when the immediate transportation entry was accepted at the port of original importation.

Accordingly, entries of steel and aluminum articles covered by an entry for immediate transportation accepted at the port of original importation before March 23, may have been incorrectly rejected by CBP and/or incorrectly filed with a Chapter 99 steel or aluminum HTS classification.

CBP is working to address the incorrectly filed entries to alleviate the need for the trade to resubmit entry summaries, submit post summary corrections (PSC), or file protests. CBP is aware that some entry summaries incorrectly submitted with the Chapter 99 HTS classification may have a deadline approaching to pay the associated duties. CBP will fully consider the issues associated with these entries in enforcing the duty deadline and CBP will be addressing these entries promptly. Importers who incorrectly paid duties pursuant to the Presidential Proclamations on an AD/CVD entry, and want to request an administrative refund of these duties prior to liquidation, may file a PSC to request an administrative refund of these duties prior to liquidation.

2. Which Harmonized Tariff System (HTS) classifications under HTS 7616.99.51 are subject to the Section 232 duties.

Per the Presidential Proclamations, 7616.99.51.60 and 7616.99.51.70 are subject to the Section 232 duties.

 

If you have any questions, call customs and trade law attorney David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

China files WTO complaint over U.S. tariff actions.

pexels-photo-219014.jpeg

According to a World Trade Organization (WTO) report, the Chinese have requested a consultation with the United States under the WTO’s Dispute Settlement process about recent US tariff measures on Chinese goods.

Specifically, China claims the tariffs would be above the US bound rates of the General Agreement on Tariffs and Trade (GATT). A request for consultation begins the dispute process in the WTO. After a consultation has been requested, the parties have an opportunity to discuss the matter and find a solution without litigation. If a solution is not reached between the two parties after 60 days, China may then request a panel to adjudicate the matter.

For more information, contact trade and customs attorney David Hsu, 832-896-6288, dhsu@givensjohnston.com.

South Korea allows for increases on US auto imports in exchange for U.S. Steel tariff exemption.

pexels-photo-70912.jpeg

According to Reuters, the US and South Korea agreed on Monday (March 27th, 2018) to revise the KORUS bilateral free trade deal. As part of the deal, South Korea would improve access to U.S. automakers and in exchange the US would exempt Korean steel from the new Section 232 duty rates.

President Trump has always claimed the current KORUS agreement was “horrible” and lead to a doubling of the U.S. goods trade deficit with South Korea since 2012. While the terms have not yet been announced, the agreement likely makes South Korea is the first US ally to receive an indefinite exemption but still subject to quotas.

In addition to South Korea, Trump has temporarily excluded other major US trading partners Canada, Mexico, Australia and the European Union from higher U.S. import duties on steel and aluminium.

Check back for the latest news and as always, please contact David Hsu at 832.896.6288 or dhsu@givensjohnston.com for all your trade and international law questions.